Financial Power of Attorney in Alabama: What It Covers and How to Set It Up

Alabama separates financial and medical decision-making into two completely different legal documents, governed by different statutes with different signing requirements. Confusing the two — or assuming one document covers both — is one of the most common and costly estate planning mistakes families make.

What a Financial POA Covers

A financial power of attorney in Alabama is governed by the Uniform Power of Attorney Act (UPOAA), Title 26, Chapter 1A of the Alabama Code. It authorizes an agent to handle:

• Banking — accessing accounts, making deposits and withdrawals, managing CDs and safe deposit boxes
• Real property — buying, selling, mortgaging, or leasing land and buildings
• Investments — managing stocks, bonds, mutual funds, and brokerage accounts
• Taxes — filing returns, making payments, representing the principal before tax authorities
• Insurance — managing policies, filing claims, changing beneficiaries (requires hot powers initialing)
• Government benefits — applying for Social Security, Medicare, Medicaid, veterans' benefits
• Business operations — managing LLCs, partnerships, contracts, and employees
• Personal property — vehicles, equipment, household goods

A general grant of authority covers routine financial management. High-risk actions (gifting, trust amendments, beneficiary changes) require separate initialing as "hot powers."

What a Financial POA Does Not Cover

A financial POA has zero authority over medical decisions. It cannot:

• Consent to surgery or medical procedures
• Make end-of-life decisions
• Access medical records (though a separate HIPAA authorization can be included)
• Direct a living will or DNR order

The Medical Side: Alabama Advance Directive

Medical decision-making in Alabama is governed by Title 22, Chapter 8A — the Advance Directive for Health Care. This document combines two functions:

1. Health Care Proxy — names a person to make medical decisions if you cannot
2. Living Will — states your preferences for life-sustaining treatment

The signing requirements differ from a financial POA:

Why You Need Both

A financial POA without an advance directive means your agent can pay the hospital bills but has no say in the treatment. An advance directive without a financial POA means your healthcare proxy can authorize surgery but cannot access the bank account to pay for post-discharge care.

Most Alabama families need both documents. They are separate filings, separate agents (though you can name the same person), and separate legal frameworks.

Common Confusion Points

"Power of attorney" is not one document. When someone says "I have power of attorney," they may mean financial only, medical only, or both. Always clarify which type.

A financial agent cannot override a healthcare proxy. If your financial POA agent disagrees with the healthcare proxy's medical decisions, the financial agent has no standing. The reverse is also true.

Durability works differently. A financial POA is durable by default under the UPOAA — it survives incapacity. A medical advance directive only activates when the principal cannot communicate, then survives through the incapacity.

The Alabama Power of Attorney Kit focuses on the financial side — the UPOAA-compliant POA, bank acceptance scripts, county recording procedures, and agent duties. For the medical side, Alabama's advance directive form is available through the Alabama Department of Public Health.

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